Goodrich Petroleum Corp. (NYSE:GDP) Q3 2019 Earnings Conference Call - Final Transcript

Nov 07, 2019 • 11:00 am ET


Goodrich Petroleum Corp. (NYSE:GDP) Q3 2019 Earnings Conference Call - Final Transcript


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Good morning, and welcome to the Goodrich Petroleum Corporation's Third Quarter 2019 Earnings Conference Call. [Operator Instructions]

I would now like to turn the conference over to Gil Goodrich, Chairman and CEO. Please go ahead.

Walter G. Goodrich

Thank you, and good morning, everyone. Thanks for participating in our third quarter earnings call this morning. Despite extraordinarily weak natural gas prices in the quarter, we again achieved solid EBITDA for the quarter on the strength of our hedge position and lower lease operating expenses. As has become our practice, we have again prepared a slide presentation, and we invite you to follow the slide deck during our prepared remarks this morning. You can access the slide presentation on the Goodrich Petroleum website entitled 3Q '19 Earnings Presentation.

While we maintain a one-rig drilling program in the Haynesville, we slowed the completion cadence during the third quarter with only one gross and 0.9 net wells completed in the quarter. We are currently fracking our Loftus 27 and 34 1H well, which is a 7,500-foot lateral in the Bethany-Longstreet field, and we expect initial production in the third week of this month.

Looking forward, we are monitoring the markets closely, but our current expectation is that we will build some drilled, but uncompleted wells or DUDs as we enter 2020, including three drilled and currently uncompleted 10,000-foot non-operated Haynesville wells in the Bethany-Longstreet field.

We will review a range of CapEx and budget options for 2020 with our Board in early December, and given our current hedge position and 2020 natural gas future strip prices, we are confident in our ability to both reduce full-year CapEx compared to this year and grow production volumes more modestly, while generating an attractive free cash flow yield. Once our Board has formally approved the preliminary plan for 2020, we'll provide you with more details on the budget and planning for next year.

As I said, operationally, we continue running one rig in the core of the Haynesville in Northwest Louisiana, and this morning, we announced the completion of our Harris 2H well in the Thorn Lake field, which is -- which was recently completed as a 9,400-foot lateral in Red River Parish.

I will now turn to the slide presentation for those of you who would like to follow along and our standard disclaimer, forward-looking statements and risks factors are highlighted for you on Slide 2.

On Slide 3, we have, again, included an overview of the Company and our assets, which highlights our core Haynesville shale position in Northwest Louisiana, where we continue to maintain a 10-year net inventory of delineated development locations, which contain over 1 Tcf of natural gas reserve potential. While we maintain upside exposure to crude oil through our Eagle Ford and TMS assets, all of our current activity is focused on the core Northwest Louisiana, Haynesville.

Our Haynesville position is yielding low finding cost, decreasing per-unit expenses, solid rates of return on capital invested. At the end of the third quarter, our calculated